Even though the government is gradually bringing more services under the ambit of service tax, the applicability of the tax and its payment are still a key source of confusion for many. Not from this fiscal onwards, the finance ministry is hoping as it is all set to roll out the service tax return preparer scheme by July this year.
So when it?s time for the 10 lakh-odd service tax assessees expected this fiscal, to file their returns, they would have help at hand from about 10,000 young college graduates trained by the Central Board of Excise and Customs (CBEC) to assist businesses in filing service tax returns.
?Filing of service tax returns will start from October 15, and we plan to have the tax preparers trained and ready by October 1,? a tax official said. The CBEC is likely to notify the scheme within a month?s time and start recruiting trainee service tax preparers by July. During 2007-08, the Central Board of Direct Taxes (CBDT) similarly appointed about 4,500 tax return preparers for income tax payers.
?Service tax is relatively new and more services are brought under it every year. Many people still do not know whether they have to pay the tax and we hope that the return preparers will convince them to pay the tax,? the official said.
The Finance Bill, 2008 had spelt out that a scheme will be framed for service tax return preparers to assist in filing service tax returns and clarify any doubts. The scheme is being given final touches currently and the CBEC hopes a sizeable number of taxpayers will benefit from it.
While the main objective of the scheme is to help people file their returns, but the department hopes that they will also help increase compliance. Service tax collections have risen by 35% in 2007-08 to amount to Rs 51,600 crore. The department estimates that collections will rise further to Rs 64,460 crore in this fiscal.